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The Federal Circuit has dispensed with its own two-part test for determining whether DJ jurisdiction has been established based on dicta in the Supreme Court’s recent Medimmune decision. While would-be defendants may now establish the existence of a case or controversy under Article III more easily, it remains an open question how low the threshold will become — as explained by Judge Bryson in his March 26, 2007 concurrence in Sandisk.

In Teva v. Novartis, No. 06-1181 (Fed. Cir. March 30, 2007)(Gajarsa, J.), the Federal Circuit reversed the dismissal of Teva’s declaratory judgment action based on the Supreme Court’s recent Medimmune decision. Formally recognizing the Supreme Court’s repudiation of the Federal Circuit’s “reasonable apprehension of imminent suit” test, the court held that Teva had established DJ jurisdiction sufficiently under the “all circumstances” test of Medimmune.

Novartis listed five patents in the Orange Book directed to various aspects of its Famvir® drug product. Teva filed Paragraph IV certifications against all five patents alleging the patents were invalid or not infringed. Novartis brought suit on only one of the patents within the prescribed 45-day period — the ‘937 patent — having the earliest expiration date. Teva sought DJ relief on the other four patents to establish “patent certainty” under 21 U.S.C. § 355(j)(5)(C), a 2003 MMA revision to the Hatch-Waxman Act. Novartis successfully moved to dismiss Teva’s suit based on its failure to establish DJ jurisdiction under the reasonable apprehension of imminent suit test of Teva Pharmaceuticals USA, Inc., v. Pfizer, Inc., 395 F.3d 1324 (2005).

On appeal, the Federal Circuit acknowledged the Supreme Court’s reaffirmation in Medimmune that an “actual controversy” requires only that a dispute be “‘definite and concrete, touching the legal relations of parties having adverse legal interests’; and that it be ‘real and substantial’ and ‘admi[t] of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical set of facts.’” The court also acknowledged dicta in Medimmune rejecting the Federal Circuit’s reasonable apprehension of imminent suit test as the only type of injury-in-fact that would support the case or controversy requirement of Article III.

Here, Teva sustained actual injury-in-fact. By choosing to sue Teva under 35 U.S.C. § 271(e)(2)(A) based on a single act of infringement, Novartis placed into actual dispute the soundness of Teva’s ANDA and Teva’s ability to secure approval of the ANDA. Moreover, Teva remains under the threat of an infringement suit because Novartis is not precluded from pursuing additional infringement suits under 35 U.S.C. § 271(e)(2)(A). In light of Novartis’ pending suit on the same ANDA, this threat of litigation was held to be a present injury creating a justiciable controversy.

The court also considered as factors supporting actual controversy and thus injury-in-fact: (1) the listing of Novartis’ patents in the Orange Book; (2) the symmetrical establishment of the ‘controversy’ requirement based on Teva’s Paragraph IV certification to Novartis; (3) the combined effect of various MMA revisions to the Hatch Waxman-Act that were designed to promote, rather than delay, efficient resolution of patent disputes; (4) the combination of the ‘937 patent listing, the Paragraph IV challenge and the litigation on the ‘937 patent as sufficient to establish actual DJ controversy as to all the paragraph IV certified patents (asserted and unasserted); and (5) the possibility of future suits arising from the same ANDA.

The decision will come as welcome news to generic pharmaceutical companies who previously have been unable to obtain declaratory relief against unasserted patents, and who have faced the prospect of uncertain exposure from an at-risk launch.

The information contained in this alert is provided for informational purposes only and does not represent legal advice. Neither the APLF nor the author intends to create an attorney client relationship by providing this information to you through this message.